Uh oh: WH Rejects Unions' Obamacare Demands

The Obama administration on Friday told labor union leaders that their health plans would not be eligible for tax subsidies under Obamacare next year. A White House official said the Treasury Department has concluded that such an exemption is not possible under the Affordable Care Act. The labor unions have been asking that their union plans, known as Taft-Hartley plans, be eligible for premium subsidies the way plans on the new insurance exchange will be. A senior administration official said the White House looked at several ways to make the union plans eligible for subsidies but couldn’t find one.

A special union carve-out isn't permitted under the legislative language, and would increase the law's costs by an estimated $200 billion over the next decade. But since when have legal niceties and price tags deterred this group? The administration has axed provisions cynically designed to "reduce costs" on paper in the past, and the president personally intervened to orchestrate a legally-dubious exemption on Obamacare subsidy rules for members of Congress and their staff. Avik Roy explains why groups like the AFL-CIO are incensed over the White House's decision:

Here’s the issue that was at stake. A number of labor unions participate in multi-employer health plans, also known as Taft-Hartley plans. These plans allow unions to organize, say, all the restaurant workers in a particular county, taking advantage of the economies of scale that come from a larger insurance pool. The problem is that, thanks to Obamacare’s employer mandate and its subsidized insurance exchanges, businesses with fewer than 50 employees now have an incentive to drop health coverage for their employees and let those workers get coverage on the exchanges...it’s a big blow to the labor unions who organize the plans, because workers no longer need unions to negotiate or obtain their health coverage.

Thus, at least temporarily, the increasingly-acrimonious rift between the White House and Big Labor will deepen. Much attention has been paid to Republican disagreements over how best to oppose Obamacare, but the more significant divisions exist on the Left; some elements of the Democrats' coalition unwaveringly support the law, while others aren't pleased with what they're seeing. I discussed this under-reported tension on Fox News on Friday:

I'll leave you with a few more Obamacare notes to kick off the week:

(1) According to a recent survey, 92 percent of federal workers and retirees would prefer to keep their current plan than be dumped into the Obamacare exchanges -- a fate that awaits millions in the private sector, despite endless "keep your plan" assurances from Obama.

(2) GE and IBM is punting thousands of retirees off of the companies' longstanding healthcare plans. Bloomberg reports that this "historic shift" could "push more costs onto US taxpayers."

(3) In an incident that will be sure to spark more discussion about the fraud risks inherent in Obamacare, Minnesota's state exchange accidentally leaked the highly sensitive private data of nearly 2,500 insurance agents in the state:

A MNsure employee accidentally sent an e-mail file to an Apple Valley insurance broker’s office on Thursday that contained Social Security numbers, names, business addresses and other identifying information on more than 2,400 insurance agents. An official at MNsure, the state’s new online health insurance exchange, acknowledged it had mishandled private data. A MNsure security manager called the broker, Jim Koester, and walked him and his assistant through a process of deleting the file from their computer hard drives. Koester said he willingly complied, but was unnerved. “The more I thought about it, the more troubled I was,” he said. “What if this had fallen into the wrong hands? It’s scary. If this is happening now, how can clients of MNsure be confident their data is safe?”

Obamacare's deadline for full implementation is two weeks from tomorrow. According to Congressional testimony heard last week, not a single state is completely ready.